February 4, 2017

Film industry seeks bump in New Mexico tax incentives

A proposal to boost New Mexico’s maximum annual payout of tax incentives for film and television productions moved forward Friday afternoon with a do-pass recommendation from the House Business and Industry Committee, despite legislators’ vexation over a mathematical error in the bill’s text.

Legislators of both parties expressed support for New Mexico’s growing film industry, though some cautioned against the perception that the state might prioritize these incentives while lawmakers struggle with pressing budget concerns.

“We just cut education twice — in the special session, we just cut it a few weeks ago, and we’re getting ready to cut it again,” said Rep. Tim Lewis, R-Sandoval. “Three times. My constituents are like, ‘Can we at least freeze the film industry in these difficult times?'”

However, backers of the bill characterized the proposed increase as an investment by the state and an adjustment for inflation.

House Bill 192 would raise the annual cap on tax breaks to $53.7 million from $50 million in the fiscal year that starts July 1. In subsequent fiscal years, the annual maximum would be determined by a formula tied to the Consumer Price Index, a federal statistical measure, which could further increase the amount of rebates available to moviemakers.

The bill’s sponsor, Rep. Daymon Ely, D-Corrales, expressed regret that the numerator and denominator of the indexing formula had been flipped, a mistake that would have kept the new cap static at $53.7 million.

An amendment to adjust the language did not quite satisfy committee members, who remained unclear on whether the bill, as written, mirrored Ely’s intent to write flexibility into the state’s rebate program.

“I’m a lawyer, not a mathematician, by trade,” Ely told committee members, saying he would fix the formula before the proposal is presented to the House Taxation and Revenue Committee.

One Republican, Rep. Yvette Herrell, R-Otero, joined the committee’s six Democrats on Friday in moving the bill forward. Lewis, although he voted against it, said he would remain open to supporting the bill once its language has been cleared up.

“We’re not asking in this bill or suggesting that we get anything new,” Jon Hendry, business agent of the state film technicians union, told the committee. “We’re simply asking you return us whole to the $50 million the governor agreed to six years ago,” a reference to a inflationary decrease in value since the cap was enacted in 2011.

Dozens of members of the local film technicians union and state SAG-AFTRA union voiced support for the legislation, alongside a lobbyist for the Motion Picture Association of America and representatives of National Education Association of New Mexico and the Rio Grande Chapter of the Sierra Club.

“This is one of the bright stars, one of the growth areas, in the state,” said Mel MacKaron, an actor and board member of the state actors’ union. “We’re not asking for a hand out, not even for a hand up. We’re asking for an investment. Because it is totally an investment in New Mexico.”

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